Appu Hotels lines up Rs 1000 cr expansion

Chennai-based Appu Hotels, which owns the five-star hotel Le Royal Meridien Chennai, has lined up over Rs 1,000 crore for various projects. This apart, it is also planning to construct a convention centre in the city.

Speaking to Business Standard, Palani G Periasamy, chairman, Appu Hotels Ltd, said the hotel chain owned around 500 rooms in the 5-star category and planned to double them by 2011-12. The proposed expansion will be funded through debt, internal accruals and equity.

“The convention centre would come up on 24 acres near the Chennai airport along with a foreign joint venture partner. The proposed investment would be Rs 500 crore,” he said.

Other upcoming projects include renovating the Chennai property with an investment of Rs 75 crore that will see an addition of 15 rooms to the existing 241, and a Rs 225-crore 5-star hotel in Coimbatore with 250 rooms, expected to be launched by this December.

He said the company was in the process of acquiring land for its proposed 5-star hotel in Puducherry at an estimated cost of around Rs 200 crore. Similar projects in three different locations in the state with an investment of around Rs 600-700 crore would also come up.

The company has a nine-acre property on the East Coast Road near Chennai, where it plans to build a resort with 100 rooms at an investment of Rs 150 crore. Similarly, it would add another 25 rooms to the 20-room four-star resort, which it took on a 15-year lease from the Tamil Nadu Tourism Development Corporation, in Kumbakonam. For this, it would invest Rs 5 crore.

The company would increase the employee strength to 1,000 by end of the current year from 500.

On the initial public offering, he said the company planned to come out with an IPO to raise Rs 200-300 crore by early 2010. However, this would depend on the market condition.